Intuit (INTU) saw its shares plummet 20% on Thursday following the release of its fiscal Q3 2026 results, which included a plan to cut approximately 17% of its workforce. Despite reporting solid revenue growth of 10% year-over-year to $8.6 billion and raising its full-year guidance, investor sentiment soured due to concerns about the impact of artificial intelligence on its core products, particularly TurboTax, which only grew 7% during the quarter.
The market’s reaction highlights a growing unease about Intuit’s competitive position as it shifts towards AI-driven solutions. While the company is expanding its share repurchase program and increasing its dividend by 15%, the slowdown in revenue growth—from 17% in Q2 to 10% in Q3—raises questions about its long-term trajectory. The restructuring efforts, aimed at simplifying operations, could further complicate execution in the near term.
For market professionals, the key takeaway is that while Intuit’s current valuation may appear attractive at about 14 times adjusted earnings, the ongoing risks from AI disruption and potential execution challenges warrant cautious positioning for those considering a buy.
Source: fool.com